9.27.13: BlackBerry Ltd: First, the bad news …

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Markets: By the numbers

Friday’s morning markets

Dow Jones Industrial Average

15,221.12 -107.18 -0.70%

S&P 500 Index

1,689.94 -8.73 -0.51%

NASDAQ Composite Index

3,769.39 -18.03 -0.48%

S&P/TSX Composite Index

12,841.27 -0.35 -0.00%

The struggling smartphone maker officially posted a quarterly loss of nearly $1-billion today and reported that revenue dived almost 50% — but its stock was climbing in early trading. The reason is investors had heard it all before as BlackBerry gave early warning of the dismal results last Friday — just days before accepting its largest shareholder’s tentative $4.7 billion bid to take it out of the public eye. The good news then was the results weren’t much worse than telegraphed. One of the uglier details on the release though was the $934-million writedown for unsold Z10 phones, the touchscreen model that the company had hoped would reverse its fading fortunes. “This write-off is very real,” Morningstar analyst Brian Colello told Reuters. “They bought a lot of inventory hoping to sell it. The auditors were not convinced that BlackBerry can sell it or sell it at prices that the company was hoping for. We see no reason to be more optimistic than them.” Perhaps in preparation for going private, BlackBerry also cancelled its after-earnings conference call scheduled for Friday.

Shelter, food, cable and Internet – they are the necessities of modern-day life, and Canadians pay a pretty penny for them, especially the latter two, reports the Financial Post‘s Christine Dobby. Canadian families spent an average of $185 per month on communications services in 2012, up from $181 in 2011, according to the latest monitoring report from Canada’s telecommunications regulator. The report, released Thursday, revealed that the communications industry as a whole generated more than $60-billion in revenues last year. The study from the Canadian Radio-television and Telecommunications Commission released every September offers a wealth of information on what Canadians watch and listen to, how they do it and how much they spend on it. This year’s report found Canadians listened to slightly less radio and watched a bit less television in 2012 than in previous years, but they watched more TV shows through the Internet and listened to more music through streaming services. The CRTC said spending was up on wireless data and Internet services with faster broadband speeds. But the real kicker: the Big Three – BCE Inc., Telus Corp. and Rogers Communications Inc. – took home 92% of revenues in the sector and had 90% market share between them, the CRTC said.

As BlackBerry faces an uncertain future and seeks to go private in a $4.7-billion deal, cracks are starting to show in the smartphone maker’s relationships with a major U.S. carrier, its electronics supplier and its large corporate clients, reports the Financial Post‘s Armina Ligaya. T-Mobile U.S. Inc., the fourth-largest carrier south of the border, told Bloomberg it will stop stocking BlackBerry smartphones in its stores, instead opting to ship the devices directly to any customers who are interested. Meanwhile, electronics supplier Jabil Circuit Inc. said it “faces a strong possibility of disengaging” with the Waterloo, Ont.-based company in the coming months. “The weakening of those relationships is a natural consequence of blacker demand for BlackBerrys,” said IDC mobile analyst Kevin Restivo. “The adverse landscape facing BlackBerry right now has caused two of its partners to make difficult choices.” BlackBerry said on Monday it had entered into a tentative agreement to sell itself to its largest shareholder, Fairfax Financial Holdings Ltd., for US$4.7-billion or US$9 a share.

Canada “won’t take no for an answer” from the United States when it comes to the Keystone XL pipeline, Prime Minister Stephen Harper said Thursday as he sharpened his sales pitch for the controversial cross-border energy proposal. The logic in support of the project going ahead is “overwhelming,” and governments at all levels on both sides of the Canada-U.S. border are endorsing it, Harper told a high-powered business audience in New York. “My view is that you don’t take no for an answer,” Harper said. “We haven’t had that. If we were to get that, that won’t be final. This won’t be final until it’s approved and we will keep pushing forward.” In his strongest rhetoric on the much-maligned project to date, Harper also dismissed the divide between his government and the White House over projections of how many jobs Keystone XL will create. “It’s just politics,” Harper told the audience at the Canadian American Business Council event. There is no real “plan B” for Canada should U.S. President Barack Obama turn down the pipeline, he added. “The logic here is overwhelming.”

Off The Rock, 600 million barrels of oil

A major oil discovery by Statoil ASA off Newfoundland opens a new frontier on Canada’s East Coast, as explorers move into deeper and riskier waters in search of undersea crude, reports the Financial Post‘s Peter Koven. Statoil, which is 67%-owned by the Norwegian government, said Thursday it is closer to commercially developing a trio of discoveries after uncovering a field holding between 300 million and 600 million barrels of oil at its Bay du Nord prospect in the Flemish Pass, 500 kilometres northeast of St. John’s. The discovery of 34 API gravity oil under 1,100 metres of water is the biggest by Stavanger-based Statoil outside Norway and the 12th-largest made globally since 2010, Geir Richardsen, vice-president of exploration with the company’s Canadian unit, said in an interview from St. John’s.The find is Statoil’s third in an area covering roughly 8,500 square kilometres after two discoveries called Harpoon and Mizzen. Harpoon is still under evaluation, but Mizzen may hold up to 200 million barrels of oil, Statoil has said. Bay du Nord is “significant, however you look it,” Mr. Richardsen said. The fact that “it’s light, good quality oil in a very good reservoir makes it an even better story.”

Barrick Gold Corp. on Thursday received a rare piece of good news from its troubled Pascua-Lama project, as Chile’s Supreme Court has upheld the miner’s environmental approval and rejected a proposal to permanently shut down the project. The move, which upholds a lower court ruling, ends a constitutional challenge that four indigenous communities filed against Pascua-Lama last year. It paves the way for Barrick to advance the project, which straddles the border between Chile and Argentina. However, Barrick still has a very difficult road ahead, reports the Financial Post‘s Peter Koven. The Chilean portion of Pascua-Lama was suspended back in April after authorities concluded that Barrick’s water management system did not meet the standards laid out in the company’s environmental permit. The company plans to complete the new system by the end of 2014 to satisfy regulators. In the meantime, Barrick has reduced capital spending at Pascua-Lama by US$1.5-billion to US$1.8-billion for 2013 and 2014.

It sounds like Netflix, only its for magazines – hundreds of them, which as the FInancial Post‘s Christine Dobby reports will soon be available in electronic form to Canadian readers. Rogers Communications Inc. said Thursday its publishing division has struck a partnership with Next Issue Media, a joint venture of five major U.S. publishers. The subscription-based app for tablet devices will give Canadian readers access to some of the biggest names in U.S. publishing, including Vanity Fair, The New Yorker, GQ, Rolling Stone and TIME. Rogers is adding its own stable of publications to the app, and will make titles like Maclean’s, Chatelaine and Today’s Parent available to U.S. subscribers as well. The Next Issue platform bills itself as the Netflix of digital magazine subscriptions, giving readers unlimited access – on their iPads or other tablet devices – to about 100 magazines for one flat monthly price: $9.99 for monthly magazines and $14.99 per month to include weeklies.

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